Mpumalanga Premier Mabuza threatens to end business arrangements with Eskom

Mpumalanga Premier David Mabuza has said that the province will have no option but to pull out of business arrangements with Eskom, unless the parastatal reviews the payment terms it enforces on municipalities

The province’s municipalities currently owe Eskom more than R1,4 billion, with the energy provider threatening to cut off electricity supply in seven municipalities which are not honouring their monthly repayments.

Mabuza said that municipalities are willing to pay their debts, but Eskom’s payment terms were unreasonable.

“The Eskom payment terms are onerous and untenable for the municipalities, and they need to be reviewed, otherwise we will have no option as a province but to pull out of the business arrangement with Eskom,” said Mabuza, speaking at a Premier’s Coordinating Forum in Mbombela on this week.

Mabuza said that numerous municipalities which are distributing electricity on behalf of Eskom are incapable of doing so.

He explained that municipalities found themselves having an escalating debt due to interest on the arrears as well as on penalties.

“We must negotiate the reasonable terms, failing which will result in the municipalities opting out because they do not have the capacity to run the business of selling electricity,” said Mabuza.

He urged struggling municipalities to hand full responsibility for electricity distribution back to Eskom, as service delivery was being negatively impacted due to the debt.

“This is not working, municipalities in the province are not making any profit by selling electricity. People are stealing electricity; some are not paying at all, yet municipalities have to pay. They should hand this responsibility back to Eskom to avert the negative impact on service delivery. Municipalities are now unable to deliver services because (they are) worrying about Eskom debt,” said Mabuza.

Mabuza said if municipalities wanted to continue distributing electricity, they needed to consider finding alternative distribution methods and reduce their energy consumption.

He also encouraged government departments that have facilities in the various municipal areas to pay municipalities for the electricity they owed.